Congressional GOP split on energy response

Boehner: Senate plan for $100 gas-tax rebate 'insulting'

By

WilliamL. Watts

WASHINGTON (MarketWatch) -- Congressional Republicans agree that high gasoline prices aren't their fault, but otherwise remain split over how to respond to an issue that may imperil their chances of holding on to majorities in the House and Senate.

A proposal by top Senate Republicans to offer taxpayers a one-time, $100 gas-tax rebate was derided as a gimmick by House Majority Leader John Boehner, R-Ohio, on Tuesday.

"The really insulting part of this whole proposal is the fact that somebody is offering $100 to every American family over this. This is not going to solve the problem," Boehner said at a news conference.

Boehner, No. 2 in the House GOP leadership after Speaker Dennis Hastert, said he had discussed the proposal with constituents over the weekend. "They thought it was stupid," he said.

Boehner was also cool to calls by Senate Republicans and the White House to give the administration authority to boost corporate average fuel economy, or CAFÉ, standards for automobiles.

Boehner said car makers "are making cars that Americans want ... The market can handle this much better" than the government, he said, adding that current fuel prices would likely spur drivers to seek higher-mileage vehicles.

Gasoline prices have soared above $3 a gallon in many parts of the country, and polls show consumers are angry with President Bush, Congress and oil companies. Meanwhile, Democrats have sought to capitalize on voter anger by tying Republican-backed energy policies, including exploration-related tax incentives included in last year's energy bill, to oil-company political donations.

"For five years, this administration has let oil companies write America's energy policies. Now, as the American people are punished at gas stations for failures in the White House, Bush Republicans are offering more giveaways to Big Oil," said Senate Minority Leader Harry Reid, D-Nev.

Republicans accused Democrats of repeatedly blocking efforts to boost domestic production while endorsing drastic conservation measures that would imperil drivers.

House Republicans are set to move forward two pieces of energy legislation this week. One measure would require the Federal Trade Commission to come up with a definition of "price gouging," and would impose criminal and civil penalties for firms that engage in gouging in fuel markets. There is currently no federal law that defines or prohibits gouging.

Democrats contend that electoral fears have driven Republicans to steal their ideas and to attempt to distance themselves from oil companies. House Minority Leader Nancy Pelosi, D-Calif., said Republicans had voted three times to block action on anti-gouging legislation sponsored by Rep. Bart Stupak, D-Mich.

"Instead of the record prices for gas and record profits for Big Oil, we could already have had laws on the books against gouging and excess profits. But the Republican energy policy has been about massive subsidies for oil companies already making historic and obscene profits, and nothing for the American consumer," Pelosi said.

President Bush's advisers have said the administration believes present antitrust laws offer adequate federal protections against price manipulation and that a federal anti-gouging law isn't necessary. See full story.

The second measure is similar to a House bill that passed last year and is designed to increase refinery capacity.

"This legislation would coordinate a badly disjointed process for seeking approval to build new biofuel, gasoline, or diesel refineries in the United States," said Rep. Charles Bass, R-N.H. "We should assist local, state, and federal officials in confronting the confusing and sometime contradictory regulations, approval timelines, and permits required by dozens of regulatory agencies."

House Republicans aim to take action in coming weeks on additional legislation to open part of Alaska's Arctic National Wildlife Refuge, or ANWR, to oil and gas exploration, and to streamline the number of boutique fuels -- cleaner-burning gasoline blends required by states to reduce emissions.

Meanwhile, Senate Republicans said they never intended their rebate proposal as a stand-alone solution to soaring gasoline prices.

"I know a lot of people have focused in on the rebate and have suggested that that doesn't do anything to solve the crisis. Well, it wasn't intended to do anything to increase supply or reduce demand. It was a way of trying to provide some help, some temporary help at a time of gas price spikes this summer driving season," Sen. Rick Santorum, R-Pa., told reporters Tuesday afternoon.

In a later appearance on PBS' "NewsHour with Jim Lehrer," Santorum acknowledged the rebate proposal appeared to be on "life support" at best.

The rebate is part of a broader plan that includes opening part of Alaska's Arctic National Wildlife Refuge to oil and gas exploration. It also calls for a crackdown on gouging and would grant Bush the authority to raise fuel-economy standards for automobiles. It also aims to replace exploration-related incentives in last year's GOP-drafted energy bill with incentives to expand refinery capacity and promote the use of hybrid automobiles.

But Frist on Monday was forced to drop a proposed accounting tax change from the measure in the face of sharp criticism from business groups, who saw it as a multi-billion dollar tax hike. Frist had hoped to use the change to the accounting method, known as "last in, first out," or LIFO, to fund the gas-tax rebates.

Frist said the LIFO plan would be examined later in the year by the Senate Finance Committee "so the pluses and minuses of the provision can become well-known."

Santorum said Republicans were unlikely to go ahead with plans to attach the overall proposal to the emergency spending bill currently on the Senate floor, and would instead seek to work with Senate Democrats "to see if they're willing to bring up energy legislation and try to deal with it in an expeditious fashion."

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